Jackson's review of fixed recoverable costs

Rédigé par Lauren Thomas le 2 Octobre 2017

Following a review of fixed recoverable costs for civil litigation, Lord Justice Jackson has recommended that fixed recoverable costs should apply to claims valued up to £25,000 (the Fast Track) and to certain cases which fall within a newly proposed ‘Intermediate Track’. This is a significant scaling back of his initial plans to apply fixed costs to all civil claims, including personal injury cases up to a value of £250,000, irrespective of complexity.

‘Intermediate Track’

As part of his long-awaited report, which was published on 31 July, Jackson outlines his proposals for a new ‘Intermediate Track’, which will involve ‘streamlined procedures’ for monetary relief cases, which are of ‘modest complexity’ and valued between £25,000 and £100,000. This new streamlined track will include personal injury, but not clinical negligence, matters.

The proposed streamlined procedures include a trial lasting no longer than three days and no more than two expert witnesses giving oral evidence on each side. Another important feature to note is that fees for counsel and other specialist lawyers should be ring-fenced in the Intermediate Track and more complex fast-track cases.

Under the new proposals, the Fast Track limit will remain at £25,000 and all Fast Track claims will be covered by Fixed Recoverable Costs. In his report, Jackson stated that it was not appropriate “to start tinkering with the existing Fast Track Fixed Recoverable Costs Regime, which overall works well”. Rather, the focus of this report was to assess how a similar regime could be introduced to a wider pool of cases where costs remain at large.

The new Intermediate Track has nine pre-trial stages and four complexity bands. Jackson has recommended that the Pre-action Protocols be amended to require parties, pre-issue, to agree the band of complexity, and that will depend upon the individual case, rather than the type of case. Ultimately the Judge on Allocation will decide on both the track and band.

Figures

As with the existing Fast Track grid, the fixed costs are a combination of a core fee and a percentage of damages. The figures are cumulative – so you get the figure stated in the box, you do not add all of the stages up.

A scaling back in approach

The rationale behind Jackson’s initial proposals was to provide transparency and certainty for all parties and ensure that the amount of legal work done is proportionate to the value of the claim. Under the current system of hourly rate remuneration, costs can quickly add up, which often leads to parties being more determined to ensure that the other side pays them, and thereby incurring further costs themselves to be successful in the proceedings. Jackson believed that by fixing the amount of costs recoverable from the losing party, by a successful party to a claim, would help to avoid disproportionately high legal costs and would encourage people to make more informed decisions on whether to take or defend legal action.

However, many critics voiced their concern that a cap on recoverable costs would in fact restrict access to justice, particularly in the case of individuals and smaller corporations. Many argued that, with a cap applying to all claims up to a value of £250,000, large corporations and governments may spend large sums of money, beyond what is recoverable, in order to fend off legal disputes with those who have fewer resources. This is particularly the case in libel cases involving powerful media corporations with greater resources, as they are in a stronger position to keep litigating and eventually grind down the opposing party.

In particular, Jackson’s revised proposals have come as a relief for many lawyers who feared that an arbitrary costs cap on all claims up to a value of £250,000 would render many cases commercially unviable.

President of the Law Society, Joe Egan welcomed the avoidance of a “one size fits all” approach, “It is essential for justice that a successful litigant is able to recover reasonable legal costs, instead of a pre-determined fixed sum. We're pleased that Lord Justice Jackson has listened to the strong feelings from solicitors and has reduced the scale of his original plans.’

Capped cost pilot

The report also recommends an opt-in pilot with capped recoverable costs for business and property cases up to £250,000 with streamlined procedures and capped recoverable costs up to £80,000. Those who opt in can expect cases to be heard within eight months of the first case management conference and will face limited disclosure and evidence and a trial lasting no more than two days.

Ed Crosse, president of the London Solicitors Litigation Association and disputes partner at Simmons & Simmons, said it will be “key to achieving greater access to justice”. Supporters of the pilot believe that robust case management will provide greater procedural efficiency and certainty to the litigation process. This should, in turn, reduce the work and associated legal costs that are currently incurred by parties under the Civil Procedure Rules. If the pilot is successful, Jackson has recommended that it be made available at the judge’s discretion for any suitable case in the Business and Property Courts or the Business and Property Lists of the County Court.

Clinical negligence

The report recognises that any cost capping regarding clinical negligence claims would require a stand-alone scheme catering for cases up to £25,000 regardless of whether they are suitable for the Fast Track, Intermediate Track or Multi-Track. Jackson therefore recommends that the Department of Health and Civil Justice Council set up a working party with both claimant and defendant lawyers to develop “a bespoke process”.

Going forward

It is clear from Jackson’s considered review that the only way to prevent a losing party from being burdened with runaway costs is to control costs effectively in advance. This is important for both transparency and certainty in civil litigation proceedings. Jackson’s report makes progress in extending fixed recoverable costs across areas where costs are still at large. Only time will tell as to how these proposals will be implemented, and whatever changes are made are expected to come into force on 1 October 2018.